NCUA is reviewing 5300 call reports, and any significant increases in member business lending, indirect lending, or loan participation delinquencies will result in an unscheduled visit from an examiner.
NCUA Chairman Debbie Matz told Texas Credit Union League members yesterday both federally and state chartered credit unions will be subject to the automatic audits, as the regulator attempts to protect the industry from mounting loan losses.
Too many fixed-rate, long-term mortgages on credit union books will also attract examiner attention, she said, because the NCUA has been warning for months that interest rates will rise.
"We urge you to take action now to make sure your portfolio is strong enough to withstand the interest-rate risks that will soon hit your balance sheet," she said.
Matz said the NCUA will practice careful regulatory oversight, and said examiners have been warned against playing "a regulatory game of gotcha."
CAMEL 3, 4 and 5 credit unions now represent nearly 20% of all insured shares, and many remaining well-capitalized credit unions will also lose capital this year due to negative earnings. Delinquencies and loan losses continue to increase and will lead to an increase in failures, she said.